In today's active M&A market, strategic buyers and private equity investors are often competing for the same acquisition. In order to stay competitive, private equity firms need to differentiate themselves and become the buyer of choice.
According to a recent CohnReznick survey of investors and middle market executives, 28.7% felt the biggest concern when selling a controlling interest in their company would be negotiating a favorable transaction. But, almost as important, 24% believed selecting the right buyer with the right fit was the biggest concern.
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"The best deals are not necessarily those offering the most money. Historically, when companies were selling a business, they tended to focus on what the buyer would think about them. Today, more sellers are shopping their prospective buyers," says Jeremy Swan, principal and the National Director for the Firm's Private Equity and Venture Capital Industry at CohnReznick, a leading accounting, tax and advisory firm.
"Private equity firms are looking to prove to potential portfolio companies that they are in the best position to introduce industry-specific intellectual capital and know-how that will be in the best interest in the company and shareholders. In today's business landscape, it has never been more critical for private equity firms to really differentiate themselves with more than money. The more focused and specialized a firm can be, the better the ability to add value and win the battle as buyer of choice."